Employee Benefits OBJECTIVES Unit 6.4 Understand and calculate the value of certain employee benefits.

Key Terms family health care individual health care employee benefits pension unemployment insurance base period worker’s compensation employee benefits insurance paid vacation time paid holiday time retirement plans stock ownership plans childcare leave

Key Terms employee benefits insurance paid vacation time paid holiday time Value-added options that an employer may choose to offer employees in addition to salary. Health, Dental, Vision, Life Regular pay during vacation Regular pay during time off for holiday

Key Terms Retirement plans Stock ownership plans Childcare leave 401(k), Roth IRA, etc. whereby company may co-contribute to future savings plan You are rewarded with company stock at the going rate Time off, often paid, for recovery from labor

Key Terms family health care individual health care pension Healthcare coverage offered to entire immediate family Healthcare coverage offered only to employee Compensation offered by company to employee after retirement

Key Terms unemployment insurance base period worker’s compensation Insures against being unemployed Amount of time determined by company .. Usually 40 hours/week Continue compensation if you get injured on the job

What are the benefits of a job? List some job benefits. What job benefits may be unique to salaried workers? Are there any requirements that a person who is collecting unemployment insurance must fulfill?

Example 1 Alan works for a printing company. It has been a little over four years since he was hired. He now makes $54,080 per year. When he was hired, he was told that he had five days of paid vacation time. For each year that he worked at the company, he would gain another two days of paid vacation time to a maximum of 20 days. How many paid vacation days does he now get at the end of four years of employment and how much will he make during the time he is on vacation?

CHECK YOUR UNDERSTANDING Let x represent the number of the working year and y represent the number of paid vacation days. Based on the table above, write an algebraic equation that models the relationship between these two variables.

Example 2 Frieda’s employer offers her family health care. Frieda must contribute 12% of the cost, and her employer will cover the rest. Frieda gets paid on a biweekly basis, and she notices that $88.50 is taken out of each paycheck for her portion of the contribution to the family health care coverage. How much does Frieda’s employer contribute for her coverage?

CHECK YOUR UNDERSTANDING Mark’s employer offers individual health care. Mark pays d dollars out of his biweekly paycheck for his share of the total cost. If Mark’s contribution is a percentage of the total cost, where p represents that percentage written as an equivalent decimal, represent the total cost of Mark’s coverage in terms of d and p.

EXAMPLE 3 Marina works at Washington Performing Arts Center. Her employer offers her a pension. Marina’s employer uses a formula to calculate the pension. A retiring employee will receive 1.5% of their average salary for the last five years of employment for every year worked. Marina is planning on retiring at the end of this year after 25 years of employment. Marina would receive this amount each year until her death. Her salaries for the last five years are $88,900, $92,200, $96,000, $98,000, and $102,000. Calculate Marina’s pension.

CHECK YOUR UNDERSTANDING DeBrown Corporation offers employees a retirement plan based upon the following formula. The retiree will get 2% of the average of the final three year salaries times the number of years employed by the company. Suppose an employee’s last three years of salaries are A, B, and C, and the employee worked at DeBrown for D years. Write the algebraic expression that represents the employee’s yearly pension.

EXAMPLE 4 In Reese’s state, the weekly unemployment compensation is 60% of the 26-week average for the two highest-salaried quarters. A quarter is three consecutive months. For July, August, and September, he earned a total of $9,024. In October, November, and December, he earned a total of $9,800. Determine Reese’s unemployment compensation.

CHECK YOUR UNDERSTANDING Wanda lives in the same state as Reese. Her weekly unemployment compensation is $360. What were the total 26-week earnings for her highest two consecutive quarters of employment?

EXTEND YOUR UNDERSTANDING Lara lives in the same state as Reese. Lara made the same weekly salary for each of the 26 weeks in her two highest consecutive quarters. She will receive a weekly unemployment compensation check for $570. What was Lara’s weekly salary when she worked for her company?